A) Work done by frictional force is always negative
B) A body at rest can have mechanical energy
C) Mechanical energy of freely falling body decrease gradually

In the diagram shown, the interface of A and B is rough. It is the frictional force acting on A, which makes A move to the right. Also direction of frictional force on A points in the right, so work done by friction is positive. Since mechanical energy of a body is the sum of kinetic and potential energy. kinetic energy of a stationary body is zero, but its potential energy, gravitational or electromagnetic is not zero. In case of freely falling body, if air drag is ignored, total mechanical energy remain conserved.